Hong Kong Stocks Heading for Five-Day Drop on Fed Concern

Hong Kongstocks slid, with the
benchmark index headed for its longest losing streak in 11
weeks, after stronger U.S. economic growth fueled concern the
Federal Reserve may cut stimulus sooner than expected.

The Hang Seng Index (HSI) fell 0.7 percent to 22,730.29 as of
9:34 a.m. in Hong Kong, its fifth day of declines as it heads
for a 2.2 percent weekly drop. The Hang Seng China Enterprises
Index lost 0.7 percent to 10,398.47. China’s top party officials
gather in Beijing for a plenum to map out reforms starting
tomorrow.

Futures on the S&P 500 gained 0.2 percent today. The equity
gauge sank 1.3 percent yesterday on speculation the Fed will
pare stimulus after U.S. gross domestic product rose 2.8 percent
in the third quarter, beating estimates for a 2 percent advance.
Tapering was expected to begin in March, based on the median
estimate from analysts surveyed by Bloomberg last month.
Jobless claims decreased by 9,000 to 336,000 in the week ended
Nov. 2 from 345,000 the prior period, the Labor Department
reported. Today’s monthly employment report may show payrolls
rose by 120,000 in October after a 148,000 gain in September,
while the jobless rate climbed to 7.3 percent.

The Hang Seng Index advanced 15 percent from this year’s
low on June 24 through yesterday amid signs China’s economy is
stabilizing. A non-manufacturing gauge this week jumped to the
highest this year after two measures of factory activity
climbed. Hong Kong’s benchmark index traded at 10.94 times
estimated earnings yesterday, compared with 15.78 for the
Standard & Poor’s 500 Index.

Reform Agenda

President Xi Jinping said a blueprint for “comprehensive
reform” will be put forward to the third plenary session of the
Communist Party Central Committee, according to a report from
the Xinhua News Agency. The focus will shift to more sustainable
growth that will reduce inequality and won’t damage the
environment, the report said.

Signs of strength in China’s economy may give the nation’s
leadership more confidence in tackling reforms. At the same
time, excessive credit growth, rising local-government debt and
weaker export momentum may sap recovery from a two-quarter
slowdown.

China’s exports rose 1.7 percent in October from a year
earlier, while imports climbed 7.4 percent, data today are
expected to show according to a Bloomberg survey. Reports on
consumer prices, industrial production and retail sales are due
this weekend.